hi my name is british punch reduce i'm an associate professor to finance
and am also the unique faculty for the new set of
i am century real estate research initiative
well we started is initiative a few years back
may need to address here
in our economy which is
getting scientific analysis of data on the illustrates sector
when i started my phd in the early nineties
training was mostly men and one where buyers and sellers have to get together at
the physical place
to transact
just in a span of one decade trading has moved away from of rover based
system to a completely automated system where buyers and sellers now interact in cyberspace
so one consequence that has been of great interest to researchers is the ability of
speech traders what used to take several minutes for trans acting now takes only milliseconds
markets
have tried to adopt
different strategies to deal with this high frequency trading
regulators are worried about some of those high frequency trading could actually result in destabilising
market
and therefore cause unintended consequences to the overall economy
recent crises board in the united states as well as in india
forced regulators to come up with creative solutions to slow down these high frequency traitors
unlike the best on regulators who are interested in actually doing forced research before the
implemented a solution
the indian regulator to the securities and exchange board of india
and actually going ahead and implemented a recognition tax
on these high frequency trainers what the stock selsa's
if a particular trader sense
many orders
and cancellations for one unit of trade
then they have to be a higher free
and this fee was meant
to make it expensive
for high frequency traitors to
transact in the marketplace
whether this fee actually resulted in any slow down or whether the slowdown actually resulted
in any to durational market quality is something that only researchers can fine
i along with a lot of mine from what university
proposition about the structure what the we are undertaking the first study in india and
actually the second study globally
and look at the back of the simulated attacks
on the market quality while the initial study which was done on the italian market
came with the conclusion that slowing down high frequency treating was not actually a good
idea
the sense that
it is actually presented an increase of treating cost and also more sent the market
quality
we in india or in a different situation
the regulation actually chose imposed initially
actually resulted in increase about the trading or increase of this high frequency trading which
rose counterintuitive
because the taxes meant to slow down
the high frequency trading
so what we are trying to do is
the first
present the back of high frequency trading on the indian markets
the union markets
i started seeing the adapted usage of algorithmic trading
from almost zero percent three two three years back to now it's twenty percent
well fine in the in the cache market and it's almost fifty percent of the
derivatives market
so clearly the
the development of pleading is going towards more and more of these p traders but
the we like it or not we have to accept that
the question always really whether
the regulation can help
prevent crises like what we have seen before
then in a very short period of time prices can form
that would need without any new information
that is the big question and had a whole lot of research
would be able to address